Founder of York Capital hedge fund returned 25% net of fees last year despite widespread mayhem in the market. Assets up 33% to $16 billion since last September. Reason: like John Paulson, shorted subprime credit on the ABX (mortgage) index. Worked first at investment bank Donaldson, Lufkin & Jenrette, then at Kellner DiLeo. Market crash of 1987 wiped out life savings, instilled mistrust of investing with margin. Leverage-free returns have averaged 17% a year since inception.